Financial Intervention

Just as your friends and family can have a significant influence on your financial life, so too can you influence the financial habits of those around you. If someone in your life is heading towards a financial crisis, then the time may have come for a financial intervention.

Interventions are necessary in many cases where addictions are involved. While most interventions are geared towards addictions that are detrimental to one’s physical health, they may also be appropriate in dealing with addictions that are detrimental to one’s financial health. The most common of these are addictions to spending and to debt.

When you do confront the person, expect resistance. Denial of the severity of the problem is to be expected. If the person realizes that there is a problem, he or she will be more likely to take corrective action. Rather, the person is probably convinced that things are under control.

Involve as many close friends as possible in the intervention. The point is not to highlight the person’s faults but rather to demonstrate that the concern for his or her well-being is widespread and that this support network will be strong during the recovery process.

Stressing the importance of breaking bad habits is only the beginning. Having a concrete plan to back things up is a much stronger position to go to someone with. If your friend’s problem is an addiction to debt, then you could go with a plan of refinancing the debt through a P2P loan from Lending Club. This approach does more than highlight the problem; it also offers a viable solution.

Knowing when a person’s finances have gotten out of hand can be difficult to judge. With the topic of money being rather private, you may need to rely on other habits to judge if a person is in trouble. If you believe that things have gone too far, then staging a financial intervention, with the support of friends and family, and providing a corrective action plan, may be the way to save your friend’s financial life.

** Projected Returns are Lending Club’s modeled return for a subset of Notes, often a Note Grade (A through G) or Subgrade (A1-G5). We calculate our modeled return using that group’s interest rates, expected losses, recovery rates, and service fees. Our model is based on the past performance of loans with similar characteristics as well as certain additional assumptions that could impact future performance. Projected Returns are not intended as a promise of future results and are not representative of the projected performance of any single Note. Individual portfolio results may be impacted by, among other things, the diversity of the portfolio, the exposure to any single Note or group of Notes, as well as macroeconomic conditions. Notes are offered by prospectus filed with the SEC and you should review the risks and uncertainties described in the prospectus prior to investing in the Notes.